Offense VS. Defense in Finance

When it comes to financial advice there are two main teachings to gain wealth. The oldest one in the book is to save your money, cut your expenses, budget and invest in the long haul. I call this method defensive finance. Offense finance is where you take calculated risks to continually achieve a higher income.

Either method will help you achieve financial independence depending on your circumstances, but you are limiting your potential if you only stick to one camp.

Your best bet is to combine both methodologies and have a balanced approach. 

Here is an example of what happens if you stick to one approach:


This person most likely will make an average income and live a minimalistic lifestyle to cut down on expenses. They will invest a good portion of their income consistently and in the long run they will be become wealthy due to compound interest.

However, they will be at a disadvantage as to how fast they can build wealth and also to what level of net worth they can reach.

One advantage to this method is that everyone can do it simply by cutting back their life style, save a portion and invest properly. 

It is simple math, spend less than you make and then invest in the long run. It also does not require much effort because you are not actively trying to increase your income.


This person aims to increase their income year over year and will spend a lot of time doing so. They are always taking calculated risks in entrepreneurship, investing in companies, real estate and climbing the corporate ladder.

This person also spends a lot of money in order to make more money. They will often spend a lot of their income back into their business, education, training, real estate properties and will even pay a premium in some services like auto repair and maintenance to save time. However, they will be at a disadvantage because there is an element of risk and more often than not there is no nest egg to fallback on if your plans go wrong. 

An advantage is that they will be able to achieve wealth at a faster rate if everything is done correctly and will also have a greater chance to accumulate more wealth than the defensive person overtime. 

My Opinion:

I believe that both methods should be used together.

Always spend less than you make, save a portion of your income, build a nest egg, invest some money and reduce your bad debt to zero.

Then have a portion of your budget attributed to potential income generating assets and also spend the time to get a good ROI on your efforts.

You may also enjoy the process of increasing your income by creating value and you will also love to see the strong asset base build over time. Trust the process, enjoy it and help others along the way.